I am the Founder of Community of Liberty, a chapter based organization committed to pursuing the art of living in liberty, a member of the Publication Committee of the Claremont Review of Books, an Advisor to TheGold StandardNow.org, and a juror for the Bastiat Prize for Journalism. I have just published with my co-author Ralph Benko the booklet, "The 21st Century Gold Standard: For Prosperity, Security and Liberty," now available as a free download at AGoldenAge.com. I bring to my columns an extensive background in the investment management business, including my experience as an equity portfolio manager, strategist, president of my former firm’s retail sales and marketing subsidiary and member of the parent firm’s management committee. As such, I have been a student and observer of the political/economy and its affects on markets, businesses, and my own business for more than 30 years.

Gingrich, The Gold Standard, And The Florida Primary

The biggest under-reported story of the South Carolina primary is winner Newt Gingrich’s campaign promise to convene a gold commission to “look at the whole concept of how do we get back to hard money.”

The only job of the Fed should be to “maintain the stability of the dollar because we want a dollar to be worth 30 years from now what it is worth now,” said Gingrich, pointing out price stability encourages savings and investment because people know what the dollar will be worth when comes time to spend it.

Monetary reform can be the issue that propels Gingrich above the tawdry attacks on his personal life and questions about his reliability all the way to the Republican nomination, because it puts him ahead of Governor Romney and Senator Santorum on a policy that enjoys a clear plurality of support among Republicans, Democrats, blacks, whites, hispanics and individuals across all income categories.

When the Rasmussen polling firm last October asked 1000 likely voters if they were “favorable or unfavorable about returning to the gold standard,” 44% were favorable versus 28% unfavorable. However, when the respondents were asked: Would you “favor or oppose returning to a Gold Standard if you knew it would reduce the power of bankers and political leaders to steer the economy?” those in favor increased to 57% versus only 19% opposed.

All the candidates agree on the need to repeal ObamaCare and Dodd-Frank, to reduce the regulatory burden on American business and to cut corporate and personal income tax rates through tax reform. But, Governor Mitt Romney promises to follow in President Obama’s footsteps as a weak dollar President, especially relative to the Chinese. Senator Rick Santorum’s website is strangely silent on the issue of monetary policy, even though the gyrations in the value of the dollar have demonstrably hurt the middle-class and manufacturing more than any other single policy.

Gingrich has seized this opening to build his appeal as the conservative candidate who can defeat President Barack Obama by making monetary reform integral to his campaign to increase the prosperity, security and liberty of the American people.

One of the most astonishing things about the gold standard is how well it works to create high paying jobs. Under the post-World War II gold standard, the unemployment rate averaged only 4.7% a year and never rose above 7%. The middle class increased its real income (as measured by the median income of males, all races) on average 2.7% a year, or 60% in just 18 years ending in 1968.

By contrast, under the paper standard, which began in 1971, unemployment has averaged 6.3% and has been above 8% for going on three years. Incredible as it may seem, the debasement of our dollar has taken away the value of every penny of nominal pay increases for 41 years, leaving the median income for males of all races in real terms in 2009 at $32,184, virtually the same as it was in 1968. Under paper money, the rich may get richer, but the middle class is left on a treadmill, barely able to keep up with rising prices.

During the post-World War II gold dollar, real economic growth averaged 4% a year. Under the paper dollar, the Obama Administration now projects growth after a relatively weak recovery of only 2.5% a year. In any one year, the difference between 4% growth and 2.5% growth is the difference between rising employment and incomes, and stagnation. Over 10 years, the difference between 4% growth and 2.5% growth translates into an economy, incomes and tax base that would be 15%, or $3 trillion larger in constant 2011 dollars.

A dollar as good as gold also contributes directly to our financial security. Today, the dollar is worth less than 20 cents in buying power when compared to the 1971 dollar. And, there is no reason to believe that its value won’t continue to erode in the years ahead.

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